Co-operatives are jointly owned and democratically controlled organizations, designed to meet the socio-economic needs of their members. Originated in the mid 19th century, cooperatives were set up to improve the living conditions of their members, contributing to the development of the welfare state in the countries they operated in.
This paper focuses on cooperatives as providers of public services in the context of an evolving welfare state. Cooperatives can be seen as hybrid forms, positioned in a co-operative trilemma between the exigencies of market, state and civil society.
We make an economic analysis of the conditions and mechanisms that make co-operatives an interesting provider of public services. Next, we discuss the comparative institutional advantage of co-operatives, as compared to for-profit and non-profit provision, in the light of an evolving welfare state. Finally, we conclude with a discussion on remaining research questions, market niches and policy recommendations.